Flexible Varying Premium Option for Long Term Care Insurance and Critical Illness Insurance

ABSTRACT

Flexible, varying long term care insurance programs are determined. Input variables such as issue age, targeted present value and year-to-year premium relationship are supplied, as are some members of a set of process variables. A non-supplied process variable is calculated based on the input variables and the supplied process variables. An insurance program based on the supplied variables and the calculated process variable is then determined, such that the premium schedule increases (or alternatively, decreases) over time to at least one leveling point, at which premiums become level.

PRIORITY CLAIM

This application is a continuation of commonly assigned, co-pending U.S.patent application Ser. No. 12/346,602, filed Dec. 30, 2008, entitled“Flexible Varying Premium Option for Combination Products Including LongTerm Care Insurance,” the entirety of which is hereby incorporated byreference (the “FIPO for Combination Products Application”). The FIPOfor Combination Products application is a continuation in part ofcommonly assigned, co-pending U.S. patent application Ser. No.11/291,554, filed Nov. 30, 2005, entitled “Flexible Varying PremiumOption for Long Term Care Insurance,” the entirety of which is herebyincorporated by reference (the “FIPO for LTCI Application”). The FIPOfor LTCI Application claims the benefit under 35 U.S.C. §119(e) of U.S.Provisional Patent Application Ser. No. 60/665,211, filed Mar. 24, 2005,entitled “Long Term Care Insurance, A New Premium Paradigm: IncreasingPremiums with Cap at Later Ages,” the entirety of which is incorporatedherein by reference.

TECHNICAL FIELD

This invention pertains generally to calculating insurance programs, andmore specifically to methodology for providing flexible increasingpremium options for long term care insurance policies.

BACKGROUND

Long-Term Care Insurance (LTCI) policies cover services includingnursing home stays, assisted living facility stays, home health care,adult day care and personal care services. Subject to benefiteligibility requirements, policies typically reimburse actual long-termcare expenses up to a specified daily maximum for a total amount up to aspecified lifetime maximum, with indemnity and disability benefitpayment plans also available.

LTCI policies typically have premiums payable for life and cover therisk and cost of long-term care services. While there are policies thathave a limited premium-paying period, such as ten years or to agesixty-five, the vast majority of policies (more than 98%) are payablefor life based on the issue age of the insured person. Since thelikelihood of using long-term care services increases with advancingage, it would require ever-increasing premiums if paid based on attainedage. The reality is that most insureds would be unable to afford thisincreasing cost. Consequently, a level premium structure that is higherfor each older issue age of the insured is typically utilized to addressthis cost problem. This level premium structure provides for significantprefunding of the greater cost of claims as people age.

In recent years, the average issue age in the individual LTCI market hasdropped from over age sixty-five to under age sixty. The average timefrom issue to claim is over ten years. LTCI has evolved from a means toprotect assets of the elderly to a retirement planning consideration forpre-retirees. Since costs of long-term care services rise over time dueto inflation, it is common and advisable for pre-retirees to purchasepolicies that allow the benefits to keep pace with this inflation.Otherwise, the policies would reimburse a progressively smaller portionof long-term care expenses.

Medicare provides limited coverage for long-term care expenses forpeople over age sixty-five. It generally pays for rehabilitative homehealth care and a limited portion of costs during the first 100 days ina nursing home. Medicaid provides broader coverage but only for theindigent. Private LTCI can potentially serve as a long-term carefinancing source for a significant proportion of the population.However, a policy with adequate coverage is fairly expensive. Forexample, the typical annual premium for an insured at issue age 50 isover $1,200.

A delay in purchase will result in even higher premiums later. This isdue to the increase in premiums by issue age and the rising cost of caredue to inflation. As well, the health status of the purchaser might haveworsened, resulting in a rejection of coverage by the insurer.

Attempts to reduce the otherwise high premium costs are available in theform of a number of policy options. A policy without a provision forannual inflation increases may contain an option that permits periodicfuture purchases of additional coverage without evidence ofinsurability. The amounts of additional coverage are usually tied to theConsumer Price Index or set at a flat percentage, such as 5%. The levelpremiums at the attained ages of the purchases will apply to theadditional coverage. An inflation variation would allow the premiums forthe subsequent inflation increases to be based on the original issueage, but at a higher initial level than the corresponding issue agelevel premium without this option. Another option provides 5% annualincreases in both the premiums and the benefits. All these options haveno limitation on future premium increases. In later years when adequatecoverage becomes critical, the premiums required can be prohibitivelyexpensive.

The expected claims in the early policy years for a particular policyare substantially less than the level premium and the reverse is true inlater years. This accounts for the pre-funding aspect in LTCI policies.However, the policy has no cash value. The insured would have paidpremiums significantly in excess of the costs of coverage if the policywere lapsed during the early years.

Due to the low frequency of claims, few insurers have credible insuredexperience to determine the premiums accurately. Insurers are subject tolong-tailed risks in claim, mortality, policy lapse, investment andexpense experience. In general, insurers' experience has beenunfavorable as evidenced by rate increases by a number of insurers onin-force policies as well as new business. For these reasons, productinnovation has been progressing cautiously.

What is needed are methods for calculating LTCI insurance programs thatare both profitable to insurers and affordable to insured parties. Also,the insurance programs should be flexible in meeting consumer'sfinancial requirements at various stages of life.

SUMMARY OF INVENTION

Methods, computer program products and computer systems calculateflexible, varying long term care insurance programs. Input variablessuch as issue age, targeted present value and year-to-year premiumrelationship are supplied, as are some members of a set of processvariables. A non-supplied process variable is calculated based on theinput variables and the supplied process variables. In one embodiment,three of the following four process variables are supplied: a set ofpolicy features, an initial premium amount, a leveling point and anultimate level premium. In that embodiment, the fourth process variableis then calculated based upon the other three and the input variables.An insurance program based on the supplied variables and the calculatedprocess variable is then determined, such that the corresponding premiumschedule increases (or alternatively, decreases) over time to at leastone leveling point, at which premiums become level. The calculatedprogram is intended to meet the present and future needs of the buyer,and yet still hit the target present value so that it is profitable tothe seller. Leveling points can be dates at which the buyer expects adecrease (or increase) in disposable income, such as retirement, payoffof loans, children entering or graduating from college, etc.

The features and advantages described in this summary and in thefollowing detailed description are not all-inclusive, and particularly,many additional features and advantages will be apparent to one ofordinary skill in the relevant art in view of the drawing,specification, and claims hereof. Moreover, it should be noted that thelanguage used in the specification has been principally selected forreadability and instructional purposes, and may not have been selectedto delineate or circumscribe the inventive subject matter, resort to theclaims being necessary to determine such inventive subject matter.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram illustrating determining an LTCI premiumschedule with an increasing pattern, according to some embodiments ofthe present invention.

FIG. 2 is block diagram illustrating a process using a plurality ofvariables to calculate an LTCI insurance program, according to someembodiments of the present invention.

FIG. 3 is a diagram illustrating the relative degree of pre-funding fora schedule calculated according to an embodiment of the presentinvention and a level premium schedule.

FIG. 4A is a graph illustrating two level premium policies, with andwithout inflation protection, assuming a 5% annual inflation rate.

FIG. 4B is a graph illustrating how both premiums and benefits can beeffectively aligned in terms of real dollars, according to an embodimentof the present invention.

The Figures depict embodiments of the present invention for purposes ofillustration only. One skilled in the art will readily recognize fromthe following discussion that alternative embodiments of the structuresand methods illustrated herein may be employed without departing fromthe principles of the invention described herein.

DETAILED DESCRIPTION

FIG. 1 illustrates a high level overview of determining an LTCI premiumschedule 100 with an increasing pattern according to one embodiment ofthe present invention. In the embodiment illustrated in FIG. 1, theschedule begins with an initial premium 101 at the first policy year anduses calculated, incremental pre-funding to increase to a policyanniversary 103 (or other point) at, for example, a pre-determinedattained age or policy duration, at which point the premium becomeslevel 105. The level premium 105 remains in effect from that policyanniversary 103 and thereafter. Through the use of incrementalpre-funding early on, the schedule can be leveled at the desired 103point even though the real cost of the policy benefits increase as theinsured party ages.

Premiums will generally become level 105 when the insured party attainsan age near normal retirement, after which the insured will be on arelatively fixed income. However, in other embodiments of the presentinvention, other ages as well as non-age based events can be used toreform the schedule 100 based on the needs of the insured or group. Anyanticipated future event of the buyer can be met through the use ofdifferent premium schedules 100, impacting the timing and amount ofpre-funding. For example, the rate of increase can be set toincrementally raise at the time of anticipated events which will raisethe buyers level of disposable income (e.g., children graduate fromcollege, home mortgage is paid off), or level off (or, alternatively,decrease) in accordance with income lowering events, such as retirement,children entering college, etc. Specific premium schedules 100 can beset by the insurers according to various embodiments of the presentinvention in order to address the needs of various segment of themarket. The schedule 100 can range from a simple schedule 100 for thegroup market that, for example, increases every three years by attainedage until age 65 to a more complicated schedule 100 that is customizedto an individual applicant in the individual market.

Schedules 100 calculated according to the present invention comprise analternative to the current issue age level premium pattern. Suchschedules 100 do not affect the underlying policy benefits. Schedulescalculated according to the present invention lower the premiums for theinitial policy years below the corresponding level premium of a policywith identical benefits. The ultimate premium will thus be higher thanthe corresponding level premium.

In many but not all embodiments of the present invention, schedules 100are calculated for policies with a provision for inflation protection.Such policies are more expensive than policies without the inflationprotection. For younger issue ages below fifty, they are more than twiceas expensive. Note also that in some embodiments, under a policygenerated by the present invention, an insured with an inflationprotection provision can choose to freeze premiums at the current leveland benefits at a corresponding level should an unforeseen event occurcausing future premiums increases to be unaffordable.

FIG. 2 illustrates the use of a plurality of variables to calculate aninsurance program 200 (i.e., a set of benefits and a correspondingpremium schedule 100) according to some embodiments of the presentinvention. Note that the example of FIG. 2 illustrates variables usedfor calculating a schedule 100 with premiums that are raised until asingle leveling point 103, as illustrated in FIG. 1. However, thevariables can be adjusted to calculate schedules 100 with multipleleveling points 103 and/or one or more increase or decrease points asdesired.

The process of calculating an insurance program 100 according to thepresent invention can utilize the following variables:

-   -   1. a set of policy features 201;    -   2. the initial annual premium 101, e.g., payable during the        first policy year;    -   3. the point 103 at which premiums become level (e.g., the        policy anniversary at which time premiums become level);    -   4. the amount of the ultimate level annual premium 105;    -   5. the issue age 203;    -   6. the year-to-year premium relationship 205 during the period        when premiums are increasing; and    -   7. a targeted present value 207 of future premiums.

The last three variables 203, 205 and 207 are inputs to an insuranceprogram determination process 208 that are specified prior to theprogram 200 calculation. With any three of the first four variables 201,101, 103, 105 selected, a value 209 for the remaining variable of thefirst four can be calculated. This output value 209 and the threeselected variables define the insurance program 200 (e.g., in theillustrated example a program 200 with a schedule 100 that increasesduring a prescribed period and then becomes level). Where morecomplicated programs 200 and/or schedules 100 are desired, the variablesare adjusted accordingly (e.g., multiple leveling dates, other types ofadjustment dates, etc.).

Given the supplied inputs, the first four variables, namely, the policyfeatures 201, the initial premium 101, the leveling point 103 and theultimate level premium 105, determine an insurance program 200. Byvarying these four factors, an insurance program 200 can be developedthat meets the budgetary requirement of a potential purchaser. Forexample, suppose that an initial premium 101 is desired for a specificplan 201, and a specific leveling age 103 is selected. The ultimatelevel premium 105 is then calculated based on the supplied variables.Alternatively, given an attained age 103 when premiums will becomelevel, an ultimate level premium 105 and a specific plan 201, theinitial premium 101 can be solved.

Each of the variables is now described in greater detail. An LTCI policyis typically defined by the following features 201: daily benefitmaximum, lifetime benefit maximum, elimination period, inflationprotection option, underwriting risk class, and other optional benefits.These features can either be inputs to the calculation process 208 orthe output 209. While the invention can solve for any one or acombination of the features, it is most convenient to solve for thedaily benefit maximum, with other features specified beforehand. Forcost and risk reasons, the insurer may impose upper and lower limits onthe daily benefit maximum.

The initial premium 101 can either be an input to the process 208 or theoutput 209. As an input, the initial premium 101 is typically expressedas a percentage of the corresponding level premium for a plan with theidentical issue age and policy features. Insurers incur considerablecosts to acquire a policy. These costs include marketing expenses,underwriting and issue expenses, commissions, risk-based capital, etc.Accordingly, insurers may want to set a minimum on the initial premium101 in order to recoup the acquisition costs within a reasonable period.

The leveling point 103 (e.g., the policy anniversary when the premiumbecomes level) can either be an input to the process 208 or the output209. It can be, for example, any anniversary after issue. In order tomake the initial premium 101 relatively low and therefore affordable,insurers may require a minimum number of increasing premium years beforepremiums become level in the future.

The ultimate level annual premium 105 can either be an input to theprocess 208 or the output 209.

Issue age 203 affects the amount of premiums since the likelihood ofclaiming for LTC services increases with age. Due to regulatoryconstraints, insurers may establish issue age limits that are differentfrom those for level premium policies.

The premium relationship 205 describes how the premium of one year isrelated to that of the prior year. Basic patterns are: a constantpercentage increase over the premium for the prior policy year, aconstant dollar increase over the premium for the prior policy year, andincreases at the beginning of regular or irregular intervals but levelduring the intervals. Any combination of the basic pattern or otherincreasing patterns is possible. Combinations with today's existingpremium patterns, such as future premium decreases or limited premiumpaying periods, are also possible. In order to minimize the potentialhardship of paying higher premiums, an insurer may restrict the amountof the annual increases.

According to its profit goals, the insurer sets the targeted presentvalue 207 of premiums. The present value 207 of any increasing premiumschedule 100 is then calibrated to meet this target 207. The targetpresent value 207 varies by issue age and policy features as describedunder the first variable.

The targeted present value 207 takes into account the expected timevalue of money and the expected persistency of policies. A discount ratedetermines the expected time value of money. The discount rate does notnecessarily tie to the expected investment return of the assets in theinsurer's investment portfolio allocated to its LTCI business. A tableof expected mortality rates that vary by attained age and a set ofexpected policy lapse rates typically form the basis for the persistencyassumption.

To determine the targeted present value 207, the insurer starts with thecorresponding level premium for the specific set of policy features 201.It calculates the projected profits based on morbidity, persistency,investment return and expense assumptions. The level premium is adjusteduntil the desired projected profits are achieved. Then, the presentvalue of the level premiums, calculated using the discount rate,mortality and voluntary lapse rates, is set as the target 207.

Once an insurer gains sufficient experience from sales of insuranceprograms 200 calculated according to the present invention, refinementscan be applied to help achieve the profit objectives more precisely. Forexample, instead of using a level premium, the insurer may use anincreasing premium schedule 100 that represents the expected average ofall the schedules 100 to be generated according to the present inventionfor a specific issue age 201 and policy features 201.

In setting the targeted present value 207, the insurer seeks to strike abalance between desired profit goals and attractiveness of the resultingpremium schedules 100 to the potential purchasers. A low target 207 willundermine the profit objectives while a high target 207 will produce anexpensive premium schedule 100, which may not compare favorably with thecorresponding level premium.

Due consideration is also given to the contingency that the insured canopt to request a freeze in future premiums at the current level with acorresponding freeze of the daily benefit maximum and the lifetimepolicy maximum. This feature is a desirable part of a LTCI policy withinflation protection provision calculated according to the presentinvention. The purpose of this option is to mitigate potential lapse bythe insured when and if future premium increases become a financialburden.

Some embodiments of the present invention add an optional feature forthose who lapse their policy, so as to give them credit based on thevalue of past premium payments up until the time of lapse. According toone such embodiment, lapsed policy holders can still be eligible forbenefits up to a paid up amount. This benefit can be triggered when thelapse occurs because a predetermined percentage or amount of premiumincrease is exceeded. In other such embodiments, the party can beeligible for the benefit when the lapse occurs for other reasons (orregardless of the reason for the lapse). In one embodiment with suchoptional features, the policy benefits will be paid up to a maximumamount equal to the prior cumulative premiums paid into the insuranceprogram 200. In another such embodiment, the policy benefits will bepaid up to a maximum amount equal to a percentage of the priorcumulative premiums paid into the insurance program 200. In yet anothersuch embodiment, the benefits are paid up to a maximum equal to theamount of premiums paid into the program 200 plus a percentage thereof.

The process 208 employs an iterative procedure to compare the targetedpresent value 207 with the present value of future premiums from theinterim premium schedule 100. Once the discounted value of a schedule100 matches the target 207, that schedule 100 becomes the solution.

It will be readily understood by one of ordinary skill in the relevantart that the steps of this process 208 can be automated (e.g., performedby a computer program) or performed manually. At least for thecalculation intensive steps, automation will be far more practical, butis not required. The implementation mechanics of the execution of thesteps of the process 208 will be readily apparent to those of ordinaryskill in the relevant art in light of this specification.

For purposes of illustration, some examples of calculating insuranceprograms 200 according to various embodiments of the present inventionfollow.

Example 1

A worker age 50 (the issue age 203) can afford to pay a $600 initialannual premium 101 and a $2,100 ultimate level premium 105 when retiredat age 65 (the leveling point 103). A schedule 100 of a $600 initialpremium 101, increasing 8.1% per year (the premium relationship 205) andreaching a cap premium 105 of $2,100 at attained age 65 (leveling point103) can fund coverage with the following policy features 201: $123daily maximum, $224,475 lifetime maximum (5 year benefit period), 90 dayelimination period and 5% compounded inflation protection.

Example 2

A worker age 42 (the issue age 203) can afford a $1,700 annual premium105 when retired at age 60 (leveling point 103) and chooses thefollowing policy features 201: $110 daily benefit maximum, no lifetimemaximum, 30 day elimination period and 5% simple inflation protection. A$873 initial annual premium 101 can fund that schedule 100, assuming apremium relationship 205 of a constant percentage premium increase peryear.

Example 3

A worker age 45 (the issue age 203) can afford a $360 initial annualpremium 101 and plans to retire at age 62 (leveling point 103). Hechooses the following policy features 201: $130 daily maximum, $237,250lifetime maximum (5 year benefit period), 90 day elimination period and5% compound inflation protection. Assuming a premium relationship 205 ofa constant percentage premium increase per year, the ultimate premium105 in this scenario will be $2,271 per year (from age 62 on).

Example 4

Assume a firm is installing a contributory insurance program for itsemployees. The coverage has the following policy features 201: a $100daily maximum benefit with a lifetime maximum of $182,500 (5 yearbenefit period), both amounts increasing 5% compounded each year, with a90 day elimination period.

For issue ages 203 of 60 and under, the firm will pay half of thepremiums calculated according to the present invention until retirement.The cap age 103 is 65 regardless of when the employee retires. For issueages 203 of 61 and above, the firm will pay half of a traditional, levelpremium schedule 100 until retirement. Employees are responsible forpremiums after retirement. The firm's contribution ceases if employmentis terminated prior to retirement.

The firm sets the initial premiums 101 for the invention generatedschedule 100 by issue age. Premiums increase each year and reach theultimate levels 105 at age 65 (leveling point 103). The initial 101 andultimate 105 premiums payable by the employees are shown below in Table1.

TABLE 1 Monthly Cap Premium Monthly Monthly Between Age 65 Cap PremiumIssue Age Initial Premium* And Retirement* After Retirement** 35 $20 $73$146 40 $22 $63 $126 45 $25 $58 $116 50 $30 $65 $130 55 $37 $72 $144 60$45 $83 $166 *Matching employer contributions **Employee onlyThe schedule 100 generated according to the present invention allows lowcontributions by the firm in the early years and delegates the fundingto the employees after retirement.

Under the current level premium pattern, premiums in the early policyyears (except for the first year) exceed the expected claims plusexpenses. Portions of the excess of premiums over claims and expensesare set aside as reserves in order to pay claims in the later years whenclaims exceed premiums and expenses. Such pre-funding will be less forpolicies generated according to the present invention than correspondinglevel premium policies.

FIG. 3 illustrates the degree of pre-funding 301 during the first 30years for a policyholder at issue age 50. The amount of pre-funding 301is represented by the area between the schedule 100 calculated accordingto the present invention or the level premium and the claims plusexpenses.

Relative to level premium policies, the lower pre-funding 301 provideslower costs of coverage for insureds who lapse or claim in the earlypolicy years (premiums are typically waived during claim). Furthermore,lower pre-funding 301 implies lower reserves in the early policy years.

In developing a LTCI product, an insurer desires a reasonable return onits capital investments. For establishing premiums, return is measuredrecognizing the time value of money. Consequently, profit margins in theearly policy years have a greater impact on the return than those in thelater years. Thus, because of the lower premiums in the early years whencompared to a level premium policy with the same benefits, the returnfrom policies calculated according to the present invention would to becorrespondingly lower, all other things being equal.

In setting the target present value 207, the insurer has two mitigatingfactors that help to offset the effect of lower initial premiums onmargins. First, in most cases, commissions, as a percentage of premiums,are higher in the first policy year than renewal years. On a discountedbasis, commissions from the increasing premium schedule 100 calculatedaccording to the present invention will be relatively lower as apercentage of premiums than the corresponding commissions from a levelpremium structure. Second, the reserves will also be lower, as describedabove. Since reserves are part of invested assets, lower reserves willalso result in lower investment returns. However, the net effect, ingeneral, would be to provide greater margins in the early policy yearsfor policies generated by the invention than for level premium policies.

Thus the present invention lowers the initial cost of coverage for theinsured while maintaining profitability for the insurer.

The present invention makes LTCI policy premiums more affordable now andlater. Individuals who cannot afford the level premiums of currentpolicies with appropriate coverage can purchase the policies generatedaccording to the present invention. For those who can afford the levelpremiums but may have to select inadequate coverage, the inventionenables them to purchase adequate coverage from the start. The expectedincreases in future earning power can offset the increases in futurepremiums.

Today's LTCI premium schedules 100 are very rigid (level), or relativelyunknown (additional periodic future purchase options). An insuranceprogram 200 generated by the invention can be customized to thepurchaser's needs. Moreover, the corresponding schedule 100 is known attime of issue so that the purchaser can budget for the future premiums.

The invention can produce a premium schedule 100 that will require fewerpremium dollars in the early years than a policy with level premiums.Should the policy lapse in the early years, the policyholder would havepaid less in premiums than with a level premium policy for the samecoverage.

LTCI is generally characterized by a relatively long period beforeclaims will be paid. Over time, the effect of increases in the costs ofLTC services due to inflation can be significant. This effect can beexpressed in terms of “real” dollars. That is, what is a dollar in thefuture worth in terms of today's dollar? ? FIG. 4A illustrates two levelpremium policies, with and without inflation protection, assuming a 5%annual inflation rate.

Without inflation protection, benefit amounts will erode in the future.While the benefits will keep pace with inflation under a policy withinflation protection feature, the insured is over-paying in real premiumdollars in the early policy years, relative to later policy years.

By using the present invention, both the premiums and benefits can beeffectively aligned in terms of real dollars, as illustrated in FIG. 4B.

In addition, the eventual level premium structure that the presentinvention can provide is appropriate for most retirees who are livingwithin fixed incomes.

It is to be understood that a general purpose computer can be programmedto perform the inventive methodology described herein, and the inventioncan but need not be instantiated in that form. Although performing theunderlying calculations manually is possible and is within the scope ofthe present invention, it is certainly more convenient and practical toprogram a computer to perform at least the calculation intensive stepsof the method. Where this is the case, the inventive methodology can beinstantiated as software, hardware, firmware or any combination ofthese. Where the invention or components thereof are instantiated assoftware, the software can be in the form of portions in computer memory(e.g., random access memory of a computer executing the software) and/orstored on computer readable media such as magnetic or optical media. Ofcourse, selling or otherwise commercializing insurance policiescalculated according to the present invention is within the scopethereof.

Critical illness insurance is a form of insurance that covers the riskof dreaded ailments such as heart attack, stroke, cancer, renal failureand major organ transplant. While its insurance risk coverage isdifferent from LTCI, the premium funding issues are identical. Theinvention applies equally well for critical illness insurance policiesas for LTCI policies.

As will be understood by those familiar with the art, the invention maybe embodied in other specific forms without departing from the spirit oressential characteristics thereof. Likewise, the particular naming anddivision of the processes, variables, modules, agents, managers,functions, layers, features, attributes, methodologies and other aspectsare not mandatory or significant, and the mechanisms that implement theinvention or its features may have different names, divisions and/orformats. Accordingly, the disclosure of the present invention isintended to be illustrative, but not limiting, of the scope of theinvention, which is set forth in the following claims.

What is claimed is:
 1. A computer implemented method for calculating aflexible, varying insurance program, the method comprising the steps of:receiving, by a computer, a plurality of input variables, comprising atleast an issue age, a targeted present value and a year-to-year premiumrelationship; receiving, by a computer, a plurality of processvariables; calculating, by a computer, a non-received process variable,based on received variables; and calculating, by a computer, a set ofbenefits and a corresponding charge schedule based on the receivedvariables and the calculated process variable, such that the calculatedcharge schedule varies over time but becomes level at at least onespecific point, according to the year-to-year premium relationship. 2.The method of claim 1 further comprising: calculating, by a computer, acharge schedule comprising at least one period during which premiumsincrementally raise to a leveling point, the calculated set of benefitsand the calculated charge schedule being informed by prefunding duringthe at least one period during which premiums incrementally raise to theleveling point.
 3. The method of claim 1 further comprising:calculating, by a computer, a charge schedule with comprising multipleleveling points.
 4. The method of claim 1 further comprising:calculating, by a computer, a charge schedule with at least one periodduring which premiums decrease to a leveling point.
 5. The method ofclaim 1 further comprising: calculating, by a computer, a chargeschedule wherein premiums incrementally raise to a single levelingpoint, at which the premiums become level for the remainder of thecalculated charge schedule, the calculated set of benefits and thecalculated charge schedule being informed by prefunding during theperiod during which premiums incrementally raise to the leveling point.6. The method of claim 5 further comprising: receiving, by a computer,three process variables from a group consisting of: a set of policyfeatures; an initial premium amount; a leveling point; and an ultimatelevel premium; and calculating, by a computer, the fourth processvariable of the group based on received input variables and the threereceived process variables.
 7. The method of claim 6 wherein: the set ofpolicy features specifies a provision for inflation protection.
 8. Themethod of claim 6 further comprising: calculating, by a computer, theset of benefits and the charge schedule such that benefits and premiumscan be frozen at any point in the calculated charge schedule.
 9. Themethod of claim 1 wherein: the varying insurance program furthercomprises a varying critical illness insurance program.
 10. The methodof claim 1 wherein: the varying insurance program further comprises avarying long term care insurance program.
 11. At least onenon-transitory computer readable storing a computer program product forcalculating a flexible, varying insurance program, the computer programproduct comprising: program code for receiving, by a computer, aplurality of input variables, comprising at least an issue age, atargeted present value and a year-to-year premium relationship; programcode for receiving, by a computer, a plurality of process variables;program code for calculating, by a computer, a non-received processvariable, based on received variables; and program code for calculating,by a computer, a set of benefits and a corresponding charge schedulebased on the received variables and the calculated process variable,such that the calculated charge schedule varies over time but becomeslevel at at least one specific point, according to the year-to-yearpremium relationship.
 12. The computer program product of claim 11further comprising: program code for calculating, by a computer, acharge schedule comprising at least one period during which premiumsincrementally raise to a leveling point, the calculated set of benefitsand the calculated charge schedule being informed by prefunding duringthe at least one period during which premiums incrementally raise to theleveling point.
 13. The computer program product of claim 11 furthercomprising: program code for calculating, by a computer, a chargeschedule with comprising multiple leveling points.
 14. The computerprogram product of claim 11 further comprising: program code forcalculating, by a computer, a charge schedule with at least one periodduring which premiums decrease to a leveling point.
 15. The computerprogram product of claim 11 further comprising: program code forcalculating, by a computer, a charge schedule wherein premiumsincrementally raise to a single leveling point, at which the premiumsbecome level for the remainder of the calculated charge schedule, thecalculated set of benefits and the calculated charge schedule beinginformed by prefunding during the period during which premiumsincrementally raise to the leveling point.
 16. The computer programproduct of claim 15 further comprising: program code for receiving, by acomputer, three process variables from a group consisting of: a set ofpolicy features; an initial premium amount; a leveling point; and anultimate level premium; and program code for calculating, by a computer,the fourth process variable of the group based on received inputvariables and the three received process variables.
 17. The computerprogram product of claim 16 wherein: the set of policy featuresspecifies a provision for inflation protection.
 18. The computer programproduct of claim 16 further comprising: program code for calculating, bya computer, the set of benefits and the charge schedule such thatbenefits and premiums can be frozen at any point in the calculatedcharge schedule.
 19. The computer program product of claim 11 wherein:the varying insurance program further comprises a varying criticalillness insurance program.
 20. The computer program product of claim 11wherein: the varying insurance program further comprises a varying longterm care insurance program.